FTC Defends W3C's Do-Not-Track Initiative To Congress

Federal Trade Commission Chairman
Jonathan Leibowitz told Congress this week that the agency supports the efforts of the standards group World Wide Web Consortium, which is developing voluntary guidelines for a do-not-track
system.

"The Commission has repeatedly and forcefully called for industry -- not government -- to implement a Do Not Track mechanism that would allow consumers to decide whether to have their
online activity ... collected," Leibowitz said in a letter to Congress. "The standard-setting work of the W3C, which includes a number of (Digital Advertising Alliance) members, is another important
means for giving consumers greater control over the tracking of their online activities."

He sent the letter in response to a request for information by Rep. Tom Graves (R-Ga.), Marsha
Blackburn (R-Tenn.) and seven other Republican House members. They wrote to Leibowitz on Friday, asking about the FTC's role in the W3C's do-not-track initiative.

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The lawmakers provided the
FTC with a host of questions, including whether the FTC was empowered to work with an "international organization" like the W3C.

The letter also asked whether it is "consistent with the intent
of Congress for the FTC to encourage an international organization to create policy that could have adverse impacts on consumers and the economy."

Leibowitz responded that the W3C is a
voluntary group, and that "there is no legal obligation for anyone to comply with a final standard, absent a promise to comply." He added that the FTC has participated in other international
initiatives, including one that resulted in the Organization of Economic Cooperation and Development's 2002 data security guidelines.

The W3C, directed by World Wide Web inventor Tim
Berners-Lee, is made up of numerous U.S. corporations, digital rights advocates, computer scientists, academic, and international entities. Participants in the organization's tracking protection group, which is crafting standards regarding browser-based do-not-track headers, currently include
members of the self-regulatory organization Digital Advertising Alliance, Network Advertising Alliance, Association of National Advertisers and American Association of Advertising Agencies.

All of the major browser manufacturers have promised to offer do-not-track headers that, when activated, send a signal that users don't want to be tracked as they surf the Web. But the signals
don't actually block tracking. Instead, it's up to ad networks and publishers to react to the signals.

The industry has long said that people should be able to opt out of online beahavioral
advertising -- that is, ads targeted based on users' Web-surfing activity -- but previous efforts centered on opt-out cookies. The problem with that method is that privacy-conscious users tend to
delete their cookies, including the opt-out ones.

The self-regulatory group Digital Advertising Alliance said in February that it would require members to honor the headers, provided
they were not activated by default. But since then, the W3C's tracking
protection group has not been able to reach a consensus on a host of issues surrounding the headers, including what type of data about people's Web use can be collected after people have turned a
header on.

Some privacy advocates say that very little data should be collected. But some Web companies say they will stop serving those users with targeted ads, but would like to continue to
gather analytics data.

Another key unresolved issue stems from Microsoft's decision to activate do-not-track by default for Internet Explorer 10 users who don't customize their Windows 8
settings. Some W3C members say that ad networks and publishers should be able to ignore any do-not-track commands set by default, but the group overall is still debating how to handle headers from
IE10 browsers.

ValueClick, which was among the companies lobbying Graves and Blackburn, says that many of the small publishers it works with could be harmed by browser-based do-not-track
headers. Chief Privacy Officer Jason Bier tells Online Media Daily that ValueClick is advocating for studies to examine the impact of the headers -- including how the browser's interface
could affect adoption.

Bier believes that consumers should be informed that publishers might not be able to afford to offer free content if people activate do-not-track commands.

In
their letter to the FTC, the lawmakers specifically asked whether the agency had studied how a do-not-track default setting "could affect the online ecosystem, Internet users, and U.S.
employment."

Leibowitz answered that the FTC hasn't completed any studies on the issue, but said that the agency "has never called for a Do Not Track by default setting."